Banxico sees signs that inflation-causing shocks are easing: minutes

The Board of Governors of Banco de México He considers that some of the shocks that have affected inflation in recent months have begun to show signs of mitigation even when the core index continues to be under pressure, according to the minutes of his most recent monetary policy meeting.

In early November, Banco de México raised the rate by 75 basis points reference interbank to take it to a historical maximum of 10%, in its twelfth straight rise, and said that it will assess the magnitude of future increases according to the prevailing circumstances.

“All (the board members) agreed that some of the shocks that have affected the inflation have given signs of mitigation and noted less pressure on supply chains,” the minutes of the meeting released on Thursday noted.

Earlier, it was revealed that Mexico’s headline inflation slowed more than expected during the first half of November to 8.14% year-on-year, however the core index continued to advance to 8.66%, a level not seen in a while. more than 22 years.

Even so, the members of the board reiterated that in the future the monetary entity will assess the magnitude of the next increases in the interest rates according to the prevailing circumstances.

In a dissenting vote, Deputy Governor Gerardo Esquivel pointed out the need to begin to reduce the rate of increases to the key rate. “This would signal that we are approaching the terminal rate of the cycle, and would be consistent with the current balance of risks,” he said.

As for the economic performance of the Latin American country, which is struggling with the weak growth prospects of its main trading partner, the United States, the bank noted that slack conditions continue to shrink.

The Gross domestic product (GDP) grew 1% between July and September, spinning four consecutive quarters of expansion, showed preliminary seasonally adjusted figures released at the end of October. The final GDP data will be published on Friday by the statistics institute.